Home sellers are finally giving buyers some ground. The problem is mortgage rates are taking it right back.
More than one in five homes listed for sale — 20.8% — had a price reduction in September, the highest share in nearly four years, according to Realtor.com's latest Monthly Housing Trends Report. Inventory climbed 5.4% from a year earlier to roughly 1.16 million active listings, leaving the market just 9.1% below pre-pandemic inventory levels.
Yet buyers didn't rush in. Pending sales fell 4.1% from a year earlier, the sharpest annual decline since March 2025, as mortgage rates climbed back above 7%.
That's the tension in the current purchase market: buyers increasingly have something they've lacked for years — negotiating leverage — but financing that purchase has become harder.
More Sellers Are Cutting Rather Than Leaving
September's 20.8% price-cut share was up 0.9 percentage points from a year earlier and marked the first time in 2026 that reductions clearly exceeded their year-ago pace.
It was also the highest September price-cut share in Realtor.com's data going back to 2018 and the highest reading for any month since October 2022.
The shift was widespread. All four U.S. regions posted higher price-cut shares than a year earlier, as did 36 of the 50 largest metros.
What's notable is what sellers aren't doing. Fewer than 6% of listings were pulled from the market in September, roughly unchanged from last year. Rather than abandoning their sale altogether, more sellers appear willing to adjust their expectations to find a buyer.
That potentially gives purchase borrowers — and their LOs — more ways to make a deal work.
A lower purchase price is the obvious one. But a motivated seller can also create room for closing-cost assistance, seller credits, or a temporary or permanent rate buydown, depending on the loan and transaction.
More Homes, Fewer Deals
Active listings grew 5.4% year over year, reaching approximately 1.16 million homes. The inventory gap compared with 2017–2019 narrowed to 9.1%, the closest the market has come to pre-pandemic inventory levels.
But that additional supply didn't translate into stronger demand. Pending listings fell 4.1% year over year after declining just 0.2% in August.
Inventory isn't rising solely because homeowners are suddenly flooding the market with new listings. New listings increased only modestly from a year ago. Homes are also accumulating because buyers aren't absorbing the available supply quickly enough.
Mortgage rates help explain why.
Freddie Mac's weekly average for a 30-year fixed mortgage climbed to 7.03% in late September, its highest level since January 2025. More current rate measures have moved higher still as Treasury yields have surged.
The 10-year Treasury yield, a key benchmark for mortgage pricing, reached 5.34% on Oct. 1, its highest level since 2002, amid a broader global bond selloff.
That means sellers may be becoming more flexible at precisely the moment financing is becoming more expensive.
Buyer Leverage Isn't The Same As Affordability
A market with more listings, longer selling times and more price reductions can shift negotiating power toward buyers without necessarily making the monthly payment affordable.
That appears to be increasingly true this fall.
Realtor.com's September data show a housing market moving closer to balance on the real estate side: more inventory, more price reductions, and sellers who are largely staying on the market rather than pulling their listings.
On the mortgage side, however, the math has moved in the opposite direction.
That helps explain why borrowers are looking beyond the traditional 30-year fixed mortgage for relief. Adjustable-rate mortgages recently accounted for 9.8% of mortgage applications, up from 6.3% several months earlier, according to Mortgage Bankers Association data.
The national figures also conceal a substantial regional divide. Inventory has already moved above pre-pandemic norms in parts of the South and West, where sellers generally face more competition and price reductions are more common.
The Northeast remains far tighter.
That means a buyer's negotiating power — and an LO's ability to use seller concessions as part of the financing strategy — can vary dramatically from one market to another.
